The new model will be powered by a 1.5 litre diesel engine and will qualify for the excise duty benefit, enjoyed by small cars in India. At present, any car with a petrol engine capacity under 1,200 cc or diesel engine under 1,500 cc, but length shorter than four metres, attracts an exciseduty of 12 per cent.

"While developing this product we have paid particular attention to making this car look different and we are sure that it will appeal to customers with its young and sporty looks and that too without compromising the benefits which our existing Verito has to offer," Shah said.

The Verito Vibe is being directly pitched against Maruti Suzuki's Swift Dzire, which is priced between Rs 4.92 lakh and Rs 6.74 lakh for the petrol option and between Rs 5.99 lakh and Rs 7.5 lakh (ex-showroom, Delhi) for the diesel variant.

Honda Cars India launched Amaze with the diesel option costing between Rs 5.99 and Rs 7.60 lakh; the petrol version will be available at a price range of Rs 4.99 lakh to Rs 7.50 lakh (ex-showroom, Delhi).